Anta Sports Core Capability Goes To The Top Again, And 2020 Is Still Exceeding Expectations.

In 2019, the market value of Anta sports (02020) doubled, and the main brand went further. FILA continued to grow more and more brands continued to fission. Desanto adjusted the results and made a successful profit, and Amer integrated smoothly. Based on the long term, we should focus on the core capability, step up the stage, change from Business to Brand, realize the comprehensive evolution of design / R & D / brand marketing / retail operation and multi brand synergy, and comb the Amer China business in 3-5 years, expand the Amer global business in 5-10 years, and finally grow into the leading brand in the world. The current stock price corresponds to PE22 times in 2020, and gradually ushered in the allocation interval, maintaining the "buy" rating, and continue to focus on recommendation.

Double market 2019: double in one year, what are the companies going up?

Anta doubled its market value in 2019, of which net profit continued to maintain high growth, net profit of 2017-2019 years maintained a compound growth of 30%+; second, the valuation increased from 20 to 25+ times (40%) at the end of 2018. Double market performance in 2019, three factors to promote performance and Valuation: first, the main brand will not fail to meet expectations, double-digit growth will be maintained throughout the year, and the growth rate will increase in the second half of the year. Second, FILA continues to exceed expectations, and the annual growth rate is expected to exceed 50% (much higher than 30% guidelines). (3) Amer integrated Price-in, 2019Q2 successfully completed the merger and acquisition, and successfully completed the adjustment of the organizational framework.

　　 2020, how to look for potential super expectations?

Looking forward to the whole year, we believe that the company still has the possibility of exceeding expectations. It is analyzed from three dimensions:

Main brand: growth rate is expected to be stable in double digit center. R & D investment has accumulated a lot, constantly improving product building ability, and improving shopping center's share / continuous expansion area / update store image to promote store efficiency.

FILA: when the store structure optimization is carried out, the footwear proportion will be increased, and the 30%+ growth will be higher. Considering that there is still room for improvement in low efficiency stores (40% stores <50 monthly store effect), category store expansion may increase (shoes ratio is expected to rise), brand fission is still continuing, FILA classic is expected to maintain about 20% store efficiency improvement, 2500 stores, and 100-200 5%-10% (+ 5%-10%) + remaining stores to be resumed every year.

3. Di Sant: the supply chain problem is solved steadily, the profit cycle is faster than FILA, and the store efficiency is improved rapidly. 2019H1 has a profit and loss balance. At present, there are 130-140 stores, and the single store effect is more than 500 thousand / month. Medium and long term target 300-500, 70 shop effect, contribute 30-40 billion water.

In the long run, how to understand the certainty and space of Amer integration?

The key is to conquer the Chinese market and retain the original team overseas. Anta has contributed to the rapid development of Amer's core brand (Salomon &Wilson) in the Chinese market from the product / supply chain / retail dimension. Combined with the analysis of the development process of FILA, we predict that in the next 5-7 years, the scale of China's Amer Sports business revenue will increase by 6-8 times, and it is expected to exceed 1 billion euros, accounting for over 15% (5%). In the future, Amer's global revenue is expected to grow more than 2 times (revenue composite CAGR=10%-15%), and 3 3 Euro scale brands (Solomon, ewe bird, Wilson) and EBIT Margin to over two figures.

risk factor

The impact of emergencies, Amer Sports integration effect remains uncertain; consumption boom downward expectations.

Investment suggestion

We should be optimistic about the company's core competence and step up to realize the comprehensive evolution of design, R & D, brand marketing, retail operation and multi brand synergy, and through 3-5 years to comb Amer China business, expand the Amer global business in 5-10 years, and finally grow into the world's top sports brand dragon head. The current stock price corresponds to PE22 times in 2020, and gradually ushered in the allocation interval, maintaining 2019-2021 years EPS forecast 2.01/2.69/3.46 yuan (corresponding to 2.22/2.97/3.83 Hong Kong dollar), maintaining the "buy" rating, and continue to focus on recommendation.